1. Power System Marginal CO2 Production Factors Jeff King Northwest Power and Conservation Council Presented to the RTF April 18, 2006

2. 2 Marginal system CO2 Production Factor The amount of carbon dioxide (lbCO2/kWh) produced by the marginal resource required to meet load. Typically assessed as an average over some period, e.g., a year, and therefore an average of the CO2 production of many different resources that may be on the margin during the period.

3. 3 Applications Impact of energy efficiency measures on CO 2 production & resulting cost-effectiveness (RTF issue). Systemwide reduction in fuel consumption from CHP development (OR Energy Trust issue)

4. 4 We can use AURORA xmp® to identify the marginal resource for each hour Identify hourly marginal (highest-cost dispatched) Northwest resource Calculate marginal CO2 factor for hour. This resource (and its effects, such as CO2 production) will (generally) be the resource displaced for that hour by new resource additions.

5. 5 Northwest resources on the margin 5 th Plan Portfolio

6. 6 Estimated annual average marginal system CO2 production factors

7. 7 Marginal CO2 factor is higher than average factor in the Northwest

8. 8 Comparison to earlier estimate (May 2000)

9. 9 Why the difference? Existing resource mix – much less gas Future resource mix – less wind & conservation Modeling approach West-wide vs Northwest

10. 10 Sensitivity to load sector Segment 1: 0800 – 1800 M-F Segment 2: 0400 - 0800/1800-2200 M-F; 0400 – 2200 S&S Segment 3: 2200 - 0400 M-F Segment 4: 2200 - 0400 S&S

11. 11 Marginal CO2 factor is relatively insensitive to the rate of conservation acquisition

12. 12 High fuel prices do not significantly affect marginal CO2 factor in near & mid-term

13. 13 CO2 value of conservation

14. 14 Limitations Marginal resource may be external to region for some hours Can be identified, but computationally difficult AURORA often identifies a “must-run” (e.g. cogen) unit as the marginal resource Assumed natural gas resource is the “real” marginal resource in these cases Biomass units, though uncommon, often end up on the margin Institutional constraints can lead to suboptimal dispatch in the real world

15. 15 Conclusions Marginal rate of CO2 production in the Northwest is expected to range from 0.88 – 0.95 lb CO2/kWh. Lower than earlier estimates. Varies significantly by hourly load sector (-15% to +40%). The marginal rate is relatively insensitive to conservation acquisition rate or fuel prices. The average rate is likely to be more sensitive to these factors. The CO2 value of (flat output) conservation ranges from $0 to about $15/MWh using the range of CO2 costs considered in 5 th Plan.